(Reuters file)
(Reuters file)

France’s Total drops out of HPCL's second LPG cavern project

  • Total SA is HPCL’s partner in the first LPG cavern in Visakhapatnam, Andhra Pradesh
  • The cavern will be the second such facility in India and will cost 800 crore for 80,000 metric tonne capacity

Mumbai: State-run Hindustan Petroleum Corp. Ltd (HPCL) will go solo in building its second liquefied petroleum gas (LPG) cavern in Mangalore, Karnataka.

HPCL, which was in talks with France’s national oil company Total SA to partner in building an underground LPG storage facility, said the French multinational has dropped out of the project but did not provide a reason for the same.

Total SA is HPCL’s partner in the first LPG cavern in Visakhapatnam, Andhra Pradesh.

“We will be building the LPG cavern on our own. Our board has approved the project," said MK Surana, chairman and managing director, HPCL. He was speaking at the company's annual general meeting.

The cavern will be the second such facility in India and will cost 800 crore for 80,000 metric tonne capacity. HPCL already has an LPG import facility in Mangalore. Looking at growing demand for LPG, HPCL thinks a new cavern is a commercially viable option.

HPCL and Total SA, through their joint venture South Asia LPG (SALPG), operate a 60,000 metric tonne underground LPG storage facility in Visakhapatnam, which was commissioned in 2007 at an investment of 333 crores.

HPCL's cavern at Visakhapatnam has been dug in the rock to store LPG. The storage facility is made up of two caverns of 19 metres in height, 20 metres base width, and 160 metres in length with inter-connections.

Besides being safe from natural calamities and hazards such as sabotage and aerial bombings, the caverns are leak-, and fire-proof.

HPCL expects to complete the project in four years. Being the second-largest LPG marketer in India, in 2018-19, HPCL’s LPG sales grew 7.1% year-on-year, the company said in its 2018-19 annual report.

LPG consumption rose 6.8% over 2017-18 on account of increased LPG penetration in the country due to the implementation of Pradhan Mantri Ujjwala Yojana (PMUY) and other LPG programs initiated by the central government.

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